Nasdaq-listed iGaming technology company Lottery.com has announced financial results for Q4 and full-year 2021. The business posted revenue of $21.5 million in Q4, up $18.2 million versus the prior-year period; while it delivered full-year revenue of $68.5 million, up $61 million from 2020.
The Texas-based company, which offers mobile and online platforms that enable players and commercial partners to remotely purchase legally sanctioned lottery games, also completed its business combination with New York-based special purpose acquisition company Trident Acquisitions Corp. during this period, taking Lottery.com public.
“In the fourth quarter and throughout 2021, we demonstrated our ability to execute our strategic growth initiatives across the business to generate strong revenue growth and gross profit,” said Tony DiMatteo, Lottery.com Co-Founder and CEO. “B2C sales increased compared to the prior-year period, despite no digital marketing spending. LotteryLink, our affiliate program, expanded and generated multiple revenue streams.”
For full-year 2021, the company delivered pro forma revenue of $70.5 million and Adjusted EBITDA of $31.1 million. However, Lottery.com also delivered a full-year net loss of $9.3 million, widened from a $5.8 million loss in 2020.
“We entered 2022 with positive momentum and continued focus on executing our strategic growth plan,” DiMatteo added. “Fueled by approximately $43 million of proceeds from our business combination and $30 million received from the sale of LotteryLink credits, we are investing in initiatives to drive growth.”
Revenues for Q4 2021 were driven by the sale of LotteryLink credits to a LotteryLink affiliate, primarily to acquire prepaid lottery games from the company in conjunction with the affiliate’s launch of a pilot promotional campaign at a national grocery chain.
The company also sold LotteryLink credits for marketing materials, product development and $3.0 million in prepaid advertising credits, while B2C lottery ticket sales increased substantially from the prior-year period, despite no digital marketing spend.
A net loss of $12.9 million in Q4 was driven by non-cash stock compensation expense of $15.5 million, and included $8.8 million of interest expense, which was driven by a non-recurring expense associated with conversion of debt to equity at the time of the business combination.
Meanwhile, full-year financial highlights include a revenues increase of 819% when compared to 2020, a growth primarily driven by the sale of $47.1 million of LotteryLink credits for prepaid advertising, prepaid lottery games, marketing materials and product development. Increased B2C sales also contributed to revenue growth.
Pro forma revenues for the year were $70.5 million, including the full-year impact of Global Gaming Enterprises, which the company acquired in June 2021. Global Gaming owns an 80% equity interest in each of two Mexican lottery entities: JuegaLotto and Aganar. Full-year gross profit of $49.4 million was primarily driven by profits from the sale of LotteryLink credits and higher data sales, generating margins above the company average.
Along with its financial report, the business provided an update on a series of key initiatives. Lottery.com has advanced its B2C user growth initiatives, signing an agreement with T-Mobile to become its exclusive digital lottery brand, advertising on T-Mobile platform in rideshare vehicles; and tested B2C ad campaigns on multiple digital outlets in Q1 2022, with the company intending to use this data to launch broader marketing campaigns in Q2.
Affiliate program LotteryLink launched a pilot program with a national grocery store chain, which is expected “to expand in the second quarter of 2022.” The company also added ICARO Media Group as an affiliate to promote Lottery.com B2C products in South America.
The lottery ticket management service has also detailed the next steps in its Project Nexus. Announced last year, Project Nexus is a blockchain-based gaming platform being developed by Lottery.com to operate lottery and other forms of online gaming worldwide.
Phase 1 launch is anticipated in early Q2, expected to increase platform scalability, security and the ability to implement product updates. Phase 2 will be rolled out by the end of Q3, and will enable additional revenue-generating features for existing products.
Lastly, Phase 3 is anticipated by the end of Q4, expected to enable the support of a proprietary game that accepts payment in fiat or crypto-currency, subject to regulatory and compliance requirements.
Lottery.com has also announced anticipated entry into five new domestic jurisdictions, expected to occur by the end of 2022.